F88 Pawnshop Chain Reports Loss in H1 After Investigation

F88 Business JSC, a prominent financial service provider in Vietnam, has announced a loss of VND368 billion (US$15.3 million) in the first half of the year following investigations into alleged wrongdoings at the company. Founded in 2013, F88 operates a network of 830 branches across the country and has positioned itself as the fastest-growing financial service provider in Vietnam. In response to the investigation, the company has implemented new processes, regulations, and penalties for debt collection activities to ensure compliance with the law and prevent any individuals from breaking the rules.

Despite reporting consistent profits from 2019 to 2021, with annual figures ranging in the tens or hundreds of billions of Vietnamese dong (VND10 billion equals US$415,000), F88 experienced a loss this year. In 2020, the company achieved after-tax profits of over VND200 billion. Representatives of the pawnshop and loan firm attribute the loss to the high cost of risk, which encompasses the expenses incurred due to risks and risk management across all aspects of the company’s operations.

The recent inspection into debt collection activities within the financial sector, including F88, has impacted customers’ willingness to repay their debts. This has compelled businesses to adopt a more cautious approach to risk, limiting the amount of risk they are willing to undertake to achieve their objectives.

In recent times, police investigations have targeted several F88 branches nationwide, including those in Ho Chi Minh City, Binh Duong, and Can Tho, due to various violations such as mismanagement of data and inadequate business activity reporting. In Ho Chi Minh City alone, investigations are underway involving 10 individuals, including managers and staff members of the company.